05 10-14 sapporo results-q4

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05 10-14 sapporo results-q4

  1. 1. Financial Results for the three Months Ended March 31, 2014 — Consolidated (Based on Japanese GAAP) May 9, 2014 Company name Sapporo Holdings Limited Security code 2501 Listings Tokyo Stock Exchange (First Section); Sapporo Securities Exchange URL http://www.sapporoholdings.jp/english/ Representative Tsutomu Kamijo, President, Representative Director and Group CEO Contact Toshihiko Umezato, Director of the Corporate Communications Department Telephone +81-3-5423-7407 Scheduled dates: Filing of quarterly financial report May 14, 2014 Commencement of dividend payments - Supplementary information to the quarterly earnings results Available Quarterly earnings results briefing held Yes (mainly targeted at institutional investors and analysts) 1. Consolidated Financial Results for the three Months Ended March 31, 2014 (January 1 – March 31, 2014) (Amounts in million yen rounded down to the nearest million yen) (1) Operating Results (Percentage figures represent year-over-year changes) Net sales Operating income Ordinary income Net income million yen % million yen % million yen % million yen % Three months ended March 31, 2014 112,084 11.5 (1,726) - (2,348) - (3,815) - Three months ended March 31, 2013 100,498 3.2 (4,755) - (5,191) - (3,068) - Note: Accumulated other comprehensive income Three months ended March 31, 2014 (5,994) million yen Three months ended March 31, 2013 4,050 million yen Net income per share Diluted net income per share Yen Yen Three months ended March 31, 2014 (9.78) - Three months ended March 31, 2013 (7.84) - 1
  2. 2. (2) Financial Position Total assets Net assets Shareholders’ equity ratio Net assets per share million yen million yen % yen March 31, 2014 589,998 146,545 24.2 366.07 December 31, 2013 616,752 155,366 24.6 388.77 Note: Shareholders’ equity March 31, 2014: 142,822 million yen December 31, 2013: 151,683 million yen 2. Dividends Dividend per share Record date or period End Q1 End Q2 End Q3 Year-end Full year yen yen yen yen yen Year ended December 31, 2013 — 0.00 — 7.00 7.00 Year ending December 31, 2014 — Year ending December 31, 2014 (forecast) 7.00 7.00 Note: No changes were made to dividend forecasts in the three months ended March 31, 2014. 3. Forecast of Consolidated Earnings for the Year Ending December 31, 2014 (January 1 – December 31, 2014) (Percentage figures represent year-over-year changes) Net sales Operating income Ordinary income Net income Net income per share million yen % million yen % million yen % million yen % yen Year ending December 31, 2014 537,700 5.5 15,000 (2.2) 13,600 (10.1) 5,000 (47.1) 12.82 Note: No Changes have been made to earnings forecasts since the latest release. 2
  3. 3. 4. Other *For details, see "2. Other" on page 9. (1) Changes in significant subsidiaries during the three months ended March 31, 2014: None (2) Simplified accounting: Yes *Use of simplified accounting methods and/or accounting methods specific to quarterly consolidated financial statements (3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement 1) Changes in accordance with amendments to accounting standards etc.: None 2) Changes other than 1) above: None 3) Changes in accounting estimates: None 4) Retrospective restatement: None Note: For details, see (2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement, in section “2. Other” on page 9 in the accompanying material. (4) Number of shares issued and outstanding (common stock) 1) Number of shares issued at end of period (treasury stock included): March 31, 2014: 393,971,493 shares December 31, 2013: 393,971,493 shares 2) Number of shares held in treasury at end of period: March 31, 2014: 3,820,894 shares December 31, 2013: 3,805,058 shares 3) Average number of outstanding shares during the period: Three months ended March 31, 2014: 390,155,704 shares Three months ended March 31, 2013: 391,378,116 shares *Quarterly review status The quarterly financial results are not subject to quarterly reviews pursuant to the Financial Instruments and Exchange Act. The quarterly review of the quarterly financial results herein had not been completed as of the date of this document. Appropriate Use of Earnings Forecasts and Other Important Information This document contains projections and other forward-looking statements based on information available to the Company as of the date of this document. Actual results may differ from those expressed or implied by forward-looking statements due to various factors. 3
  4. 4. 1. Analysis of Operating Results (1) Consolidated Financial Results for the Three Months ended March 31, 2014 In the first quarter of 2014 (January 1 – March 31, 2014), the domestic economy showed signs of a moderate recovery supported by monetary easing and economic stimulus measures. However, the consumption environment remains clouded with uncertainties as the surge in demand seen in March ahead of the consumption tax hike is expected to be followed by a decline in consumption from April caused by the higher tax rate and a reversal of the temporary demand increase before the tax hike. Amid this environment, the SAPPORO Group saw its first-quarter sales rise sharply above the previous year’s level as the March demand surge added to the year-over-year gains in shipments of beer and beer-type beverages achieved by the Japanese Alcoholic Beverage business from the start of the year. The Food & Soft Drinks business also saw sales volumes increase, with year-over-year gains from both foods and soft drink products. The International Business also did well, with support from a weaker yen, leading to a sizable increase in sales for the Group as a whole. The strong sales performance at the Japanese Alcoholic Beverage business and the Food & Soft Drinks business contributed to a sharp year-over-year reduction in the first-quarter operating loss. As a result of the above factors, the SAPPORO Group posted consolidated sales of ¥112.0 billion (up ¥11.5 billion or 12% year over year), an operating loss of ¥1.7 billion (compared with a ¥4.7 billion loss a year earlier), and an ordinary loss of ¥2.3 billion (compared with a ¥5.1 billion loss a year earlier). Extraordinary losses included the costs of ¥2.3 billion for demolition and removal posted by the Real Estate business in relation to the redevelopment of the Sapporo Ginza Building property located at the Ginza 4-chome intersection. As a result, the SAPPORO Group posted a net loss of ¥3.8 billion in the first quarter of 2014 (compared with a ¥3.0 billion loss a year earlier). Segment information is outlined below. Seasonal Factors The Group’s operating results exhibit substantial seasonal variation because demand for the products and services offered by the Japanese Alcoholic Beverages, International Business, Food & Soft Drinks, and Restaurant businesses tends to be concentrated in the summer months. Sales and profits consequently tend to be lower in the first quarter than in the other three quarters. 4
  5. 5. Japanese Alcoholic Beverages We estimate that total domestic demand for beer and beer-type beverages in the first quarter of 2014 expanded 9% year over year. Fueled by the surge in demand in March ahead of the consumption tax hike, demand rose sharply in all product categories, including beer, happoshu, and new-genre. Under these market conditions, the Japanese Alcoholic Beverage business continued its efforts to realize further growth by implementing its new vision of “seek No.1 by accumulating one-of-a-kind products” while adhering to its campaign slogan “Bringing more cheer to your ‘Cheers’!” as its constantly provides the customers with a unique value proposal. In the beer and beer-type beverages category, we achieved a solid year-on-year increase in sale of our core Yebisu brand, with increased sales of Yebisu Beer supplemented by the release again this year of a limited volume of Kaori Hanayagu Yebisu in January. In the new-genre beer segment, in February we launched Mugi to Hop The gold, a flavorful derivative of our popular Mugi to Hop, to the evident delight of many customers. In addition, Goku Zero continued to beat our sales targets for the product, a new-genre beer and the world’s first beer-type beverage with zero purine bodies. As a result, sales of our beer and beer-type beverages expanded sharply over the first quarter of 2013, as did total demand, and we increased our market share. In the RTD* category, a renewed version of Sapporo Nectar Sour Peach, launched in February, posted solid sales, while the Sapporo Otoko Ume Sour, first introduced last year, continued to post strong sales. As a result, the RTD category as a whole achieved a sizable increase in sales over the previous year’s level. At our wine and liquor business, sales of our mainstay domestic premium brand, Grande Polaire, remained on a steady pace. In March, we launched Polaire Sangria Rico, a new line of Sangria beverages that are enjoying increasing popularity, especially with young women. Sales to date have exceeded plan. Sales of our imported wines also expanded, contributing to year-over-year sales growth for our wine products as a whole. Our western spirits business also achieved sales growth, with a strong contribution from our Bacardi brand products. The shochu business achieved strong year-over-year sales growth, driven by the continued popularity of our two blended shochus – Imo Shochu Kokuimo and Mugi Shochu Koimugi. Overall, the Japanese Alcoholic Beverage business posted first-quarter sales of ¥59.2 billion, up ¥9.0 billion or 18% year over year. In addition, continued cost-control efforts enabled the business to reduce its first-quarter operating loss to ¥1.1 billion, compared with a ¥3.3 billion loss a year ago. * RTD, or ready-to-drink, beverages are already-mixed, low-alcohol content cocktail-like beverages that can be consumed as is immediately after opening. International Business In North America, we estimate that total demand in the beer market was largely flat year over year in the first quarter of 2014, despite some positive developments, including improving employment conditions. The Asian beer market, however, continues to grow steadily, supported 5
  6. 6. by the region’s fast-growing economies. In this environment, our International Business segment continued marketing activities targeting the premium beer market, where it has core strengths. However, our Canadian subsidiary SLEEMAN BREWERIES was challenged by intensifying price competition while Sapporo USA saw shipments delayed by severe winter weather in the United States. As a result, the two companies’ first-quarter sales volumes of Sapporo brand products were sluggish. Meanwhile, Silver Springs Citrus, our North American soft drinks subsidiary, continued to post solid results. In Vietnam, we continued to our full-fledged marketing activities aimed at establishing the Sapporo brand in the local market. We launched a TV ad campaign during the prime Tet (New Year’s holiday) sales season and received a favorable customer response. In South Korea, we continued our efforts to expand sales of beers to the household and commercial markets through cooperation with our local partner, Maeil Dairies’ group companies. In Oceania, we continued efforts to expand sales via our brewing licensing agreement with Australia’s Coopers Brewery, and in Singapore we worked with our local subsidiary to expand sales channels in the local household market. The efforts outlined above led to year-over-year sales volume gains for beers in each market mentioned except for North America. Overall, the International Business posted first-quarter sales of ¥10.4 billion, up ¥0.4 billion or 5% year over year, as the efforts noted above plus benefits from a weaker yen overcame the lower sales in North America. Nonetheless, the segment posted an operating loss of ¥0.8 billion (compared with a ¥0.1 billion loss a year earlier). Food & Soft Drinks Domestic demand for soft drinks in the first quarter of 2014 was initially adversely affected by heavy snowfall and then buoyed by the demand surge ahead of the consumption tax hike. We estimate overall domestic demand increased 6% year on year in the first quarter. Demand for lemon-based products (flavorings) held steady with the previous-year level, while that for instant soup (including soups in a cup) increased an estimated 6%. In this overall demand environment, Food & Soft Drinks business started its second year of integrated operations as POKKA SAPPORO Food & Beverage Ltd. The subsidiary is concentrating investments on core brands as it endeavors to strengthen and nurture its various brands. The domestic food and soft drinks business saw sales of its domestic brand drinks raise steadily in the first quarter, supported by launches of Pokka Coffee Teito, a low sugar version of the popular canned coffee drink, and Pokka Coffee Fighters Can, a limited edition sold only in Hokkaido. The Gabunomi series continued to enjoy steady sales, with a good contribution from the series’ newest member, Gabunomi Ichigo Cream Soda. In the lemon and natural foods category, we launched a renewed version of Kireto Lemon Sparkling in a 410ml PET bottle in March as a first step in preparing our summer product lineup. The new offering has been favorably received. We renewed packaging design for our core Pokka Lemon 100 brand, sales of which remained on a steady pace. Pokka Lemon Lemotte, a 10% lemon juice–based seasoning 6
  7. 7. says that can be stored at normal temperatures, enabling its use in a variety of indoor and outdoor venues. We added to our lineup of overseas brands sold in Japan. In addition to Gerolsteiner naturally carbonated water from Germany, we began sales in January of the imported bottled water brands Vittel and Contrex, as we seek to build a more robust market for hard drinking water. In the soup and related foods category, the Jikkuri Kotokoto Kongari Pan series enjoyed steady sales, supported by expanded product lineups. In the commercial-use products category, sales of our core lemon and syrup product lineups fared well, as did our soup and dessert offerings. Overall, sales rose above year-earlier levels. In new product categories, we began sales of Shoshurei-cha, a tea with roasted rice developed with the needs of people receiving nursing care in mind. In the domestic restaurants business, the Café de Crié coffee shop chain was adversely affected by the unusually heavy snowfall this winter, but timely menu revisions helped keep comparable-store sales on a steady growth pace. The overseas soft drinks business fared well overall, as a continued increase in exports helped offset some slight weakness in sales in Singapore. The overseas restaurant business had a somewhat weak amid economic slowdown in Hong Kong and a decline in tourist traffic from mainland China. As a result of above, the Food & Soft Drinks segment recorded first-quarter sales of ¥29.8 billion, up ¥2.1 billion or 8% year over year. The segment’s operating loss contracted to ¥0.7 billion (compared with a ¥1.8 billion loss a year earlier). Restaurants Japan’s restaurant industry continued to see some signs of improvement in consumer sentiment, but the overall operating environment remained difficult, with the costs burden growing heavier as yen weakness pushes up ingredient costs and energy costs. In this environment, our Restaurants business pursued the fulfillment of its corporate philosophy of “Enhancing the Joy of Living” by continuing its efforts to raise the quality of its service as well as its food and beverages, including draft beer, and by endeavoring to create restaurants that “deliver 100% satisfaction to customers.” New outlet openings in the first quarter included a new outlet in Tokyo’s Shinjuku district for the Yebisu Bar chain, one of our core restaurant brands, and six other shops, including outlets operated on a contract basis. Our ongoing effort to improve the profit structure of existing outlets included shifting older shops to smaller Ginza Lion outlets and our new Yebisu Beer Hall format, as we seek to expand the customer base. Meanwhile, we closed nine outlets during the period, including the flagship Beer Hall LION GINZA 5-Chome outlet, which we had to close for a long term as part of the redevelopment of the Sapporo Ginza Building. The net result of store openings and closings during the first quarter brings the total number of outlets open in Japan at the end of the period to 188. Overseas, our initial Ginza Lion Beer Hall in Singapore, which opened in October 2013, is doing well, and we are planning further expansion of this chain. 7
  8. 8. Overall, Restaurants business recorded sales of ¥5.6 billion in the first quarter, ¥0.0 billion or 1% lower than a year ago, largely owing to the impact of heavy snowfall in February. The segment posted an operating loss of ¥0.3 billion, equivalent to the previous year’s first-quarter result. Real Estate In Japan’s real estate industry, vacancy rates in the Greater Tokyo office leasing market continue to improve and rents are now also showing signs of a moderate recovery. Amid such market conditions, our real estate leasing business maintained high occupancy rates at its properties in the Tokyo Metropolitan area. Our core property, Yebisu Garden Place, faces the exit of a large tenant at the expiration of the lease contract this May and is steadily progressing with its efforts to find replacement tenants in order to return the facility to a high occupancy rate at an early date. Yebisu Garden Place will celebrate the 20th anniversary of its opening during 2014, and we are continuing efforts to enhance the property’s value and to provide tenants and visitors with enjoyable experiences in comfortable and pleasant surroundings. In preparation for the April opening of a large upscale restaurant on the commercial-use floor, we undertook a major renovation of public-use floors. At the complex’s rental housing building, we carried out renovations designed to enhance the building’s comfort level and amenities, including refurbishing the entrance hall, improving the building’s barrier-free and universal design features, and replacing standard equipment in each apartment unit. At the complex’s office tower, in March we completed the installation of emergency power-generating systems that will help ensure tenants’ business continuity in the event of a disaster by providing electricity supply to tenant spaces. We also began to install equipment to ensure the operation of toilets and elevators during a disaster. Completion of this work is scheduled for spring 2015. We are also proceeding with renovations to improve the flexibility of office layouts, provide more comfortable working environments, and improve the sense and usability of common-use floors. The real estate development business is making steady progress with the redevelopment of the Sapporo Ebisu Building (tentative name), which we expect to become a new center of activity in Tokyo’s Ebisu district. The building is scheduled for completion in autumn 2014. In addition, we have decided to redevelop the Sapporo Ginza Building at the Ginza 4-chome intersection. We believe the project, scheduled for completion in the first half of 2016, will stimulate activity in the Ginza district and contribute to the district’s revitalization. As result of the efforts as outlined above, the Real Estate business posted sales of ¥5.6 billion, up ¥0.2 billion or 4% year over year, and operating income of ¥2.2 billion, up ¥0.1 billion or 6%. (2) Review of Consolidated Financial Condition Consolidated Financial Condition Consolidated assets as of the end of the first quarter on March 31, 2014, totaled ¥589.9 billion, a ¥26.7 billion decrease from the end of the previous fiscal year (December 31, 2013). The decline is attributable to a decrease in notes and accounts receivable - trade, which more than offset 8
  9. 9. increases in merchandize and finished products and construction in progress. Consolidated liabilities totaled ¥443.4 billion, a ¥17.9 billion decrease from December 31, 2013, primarily reflecting a decrease in notes and accounts payable - trade and liquor taxes payable, which more than offset increases in accrued bonuses and long-term bank loans. Consolidated net assets as of March 31, 2014, totaled ¥146.5 billion, an ¥8.8 billion decline from December 31, 2013. The decline is attributable to decreases in unrealized holding gain on securities and foreign currency translation adjustments combined with the distribution of year-end dividends and the booking of a net loss for the first quarter. (3) Consolidated Earnings Forecast The consolidated earnings forecast for the full fiscal year ending December 31, 2014 is unchanged from the forecast announced by the Company on February 12, 2014. 2. Other Information (1) Changes in significant subsidiaries during the three months ended March 31, 2014 Not applicable (2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements (Calculation of tax liabilities) The Company calculates tax liabilities by producing a reasonable estimate of the effective tax rate after applying tax-effect accounting to income before taxes and minority interests for the fiscal year, which encompasses the three months ended March 31, 2014, and then multiplying income (loss) before taxes and minority interests by this estimated effective tax rate. (3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement Not applicable 9
  10. 10. 3. Consolidated Financial Statements (1) Consolidated Balance Sheets (millions of yen) December 31, 2013 March 31, 2014 Amount Amount Assets I Current assets 1 Cash and cash equivalents 11,552 10,717 2 Notes and accounts receivable - trade 87,148 62,951 3 Merchandize and finished products 20,832 22,826 4 Raw materials and supplies 13,552 12,901 5 Other 14,479 15,667 6 Allowance for doubtful receivables (228) (208) Total current assets 147,336 124,855 II Fixed assets 1 Property, plant and equipment (1) Buildings and structures 390,326 387,848 Accumulated depreciation (212,741) (211,718) Buildings and structures, net 177,585 176,129 (2) Machinery and vehicles 218,275 218,897 Accumulated depreciation (176,691) (177,283) Machinery and vehicles, net 41,583 41,614 (3) Land 115,056 115,063 (4) Construction in progress 5,668 7,054 (5) Other 37,757 37,235 Accumulated depreciation (24,768) (24,473) Other, net 12,988 12,762 Total property, plant and equipment 352,882 352,623 2 Intangible assets (1) Goodwill 34,418 33,329 (2) Other 7,566 6,830 Total intangible assets 41,985 40,159 3 Investments and other assets (1) Investment securities 51,221 49,814 (2) Long-term loans receivable 9,544 9,281 (3) Other 15,109 14,587 (4) Allowance for doubtful receivables (1,326) (1,324) Total investments and other assets 74,548 72,359 Total fixed assets 469,416 465,143 Total assets 616,752 589,998 10
  11. 11. December 31, 2013 March 31, 2014 Amount Amount Liabilities I Current liabilities 1 Notes and accounts payable - trade 35,902 31,712 2 Short-term bank loans 63,642 64,052 3 Commercial Paper 25,000 22,000 4 Liquor taxes payable 33,700 18,343 5 Income taxes payable 3,837 507 6 Accrued bonuses 2,090 4,071 7 Deposits received 10,824 10,872 8 Other 52,309 57,616 Total current liabilities 227,308 209,176 II Long-term liabilities 1 Bonds 52,000 52,000 2 Long-term bank loans 107,185 108,966 3 Employees' retirement benefits 5,907 5,584 4 Dealers' deposits for guarantees 32,423 32,764 5 Other 36,561 34,962 Total long-term liabilities 234,077 234,276 Total liabilities 461,386 443,453 Net Assets I Shareholders' equity 1 Common stock 53,886 53,886 2 Capital surplus 45,911 45,911 3 Retained earnings 37,409 30,774 4 Treasury stock, at cost (1,311) (1,317) Total shareholders' equity 135,896 129,255 II Accumulated other comprehensive income 1 Unrealized holding gain on securities 15,467 14,290 2 Deferred hedge gains (losses) 4 (1) 3 Foreign currency translation adjustments 314 (721) Total accumulated other comprehensive income 15,786 13,567 III Minority Interests 3,683 3,722 Total net assets 155,366 146,545 Total liabilities and net assets 616,752 589,998 11
  12. 12. (2) Consolidated Statements of Income (millions of yen) Three months ended March 31, 2013 Three months ended March 31, 2014 Amount Amount I Net sales 100,498 112,084 II Cost of sales 65,785 73,215 Gross profit 34,712 38,869 III Selling, general and administrative expenses 1 Sales incentives and commissions 6,780 7,583 2 Advertising and promotion expenses 6,005 5,846 3 Salaries 7,158 7,046 4 Provision for bonuses 1,352 1,360 5 Retirement benefit expenses 857 763 6 Other 17,312 17,994 Total selling, general and administrative expenses 39,467 40,596 Operating loss (4,755) (1,726) IV Non-operating income 1 Interest income 62 58 2 Dividend income 66 95 3 Foreign exchange gains 339 - 4 Other 268 176 Total non-operating income 735 331 V Non-operating expenses 1 Interest expense 734 619 2 Equity in loss of affiliates 63 8 3 Foreign exchange losses - 90 4 Other 374 234 Total non-operating expenses 1,172 953 Ordinary loss (5,191) (2,348) VI Extraordinary gains 1 Gain on sales of property, plant and equipment 10 36 2 Gain on sales of investment securities 3,477 4 Total extraordinary gains 3,487 41 VII Extraordinary losses 1 Loss on disposal of property, plant and equipment 129 1,110 2 Loss on sales of property, plant and equipment - 43 3 Loss on devaluation of investment securities 6 10 4 Loss on sales of investment securities 0 - 5 Impairment loss 222 - 6 Business structure improvement expenses 176 - 7 Compensation expenses - 1,540 Total extraordinary losses 536 2,704 Loss before income taxes and minority interests (2,240) (5,012) Income taxes 806 (1,103) Loss before minority interests (3,047) (3,908) Minority interests 21 (93) Net loss (3,068) (3,815) Loss before minority interests (3,047) (3,908) Other comprehensive income*1 Unrealized holding gain on securities 4,900 (1,176)  Deferred hedge gains (losses) 19 (12) Foreign currency translation adjustments 2,178 (896)  Total other comprehensive income 7,098 (2,086) Comprehensive income*2 4,050 (5,994) (Breakdown) Comprehensive income attributable to owners of the parent 3,770 (6,034) Comprehensive income attributable to minority interests 280 40 12
  13. 13. (3) Notes on the Going-concern Assumption Not applicable (4) Segment Information Ⅰ Three months ended March 31, 2013 (January 1, 2013 – March 31, 2013) 1. Sales, income, and loss by reportable segment Japanese Alcoholic Beverages International Food & Soft Drinks Restaurants Real Estate Total Other *1 Total Adjustments Amounts reported on the statements of income *2 Net sales (1) Operating revenues 50,246 9,953 27,637 5,741 5,391 98,969 1,528 100,498 - 100,498 (2) Intra-group sales and transfers 444 15 27 0 641 1,130 3,895 5,025 (5,025) - Total 50,691 9,969 27,664 5,741 6,032 100,100 5,423 105,523 (5,025) 100,498 Segment income (loss) (3,348) (190) (1,892) (318) 2,135 (3,615) (135) (3,751) (1,003) (4,755) Notes: (1) (2) Segment income and losses are adjusted based on operating income reported on the quarterly consolidated statements of income for the corresponding period. (millions of yen) Reportable segments "Other" comprises businesses, such as logystics businesses, that are not included in reportable segments. 2. Reconciliation and main components of differences between income and loss of reportable segments and figures on the statement of income (information on differences) (millions of yen) Segment income (loss) Amount Total for reportable segments (3,615) Total other losses (135) 3. Impairment loss on fixed assets or goodwill by reportable segment (Significant impairment losses on fixed assets) For fixed assets, such as machinery, in the International Business segment, the book value has been reduced to the recoverable amount as a result of restructuring of production facilities. Impairment loss of 222 million yen was recorded for the three months ended March 31, 2013. (Significant changes in the amount of goodwill) Not applicable (Material Gain on negative goodwill) Not applicable Unallocated corporate costs (781) Intra-segment sales (222) Operating income on the statement of income (4,755) 13
  14. 14. Ⅱ Three months ended March 31, 2014 (January 1, 2014 – March 31, 2014) 1. Sales, income, and loss by reportable segment Japanese Alcoholic Beverages International Food & Soft Drinks Restaurants Real Estate Total Other *1 Total Adjustments Amounts reported on the statements of income *2 Net sales (1) Operating revenues 59,249 10,440 29,801 5,674 5,608 110,775 1,309 112,084 - 112,084 (2) Intra-group sales and transfers 497 21 28 0 647 1,195 4,281 5,477 (5,477) - Total 59,747 10,462 29,830 5,674 6,255 111,970 5,591 117,562 (5,477) 112,084 Segment income (loss) (1,138) (891) (771) (333) 2,264 (870) 10 (859) (867) (1,726) Notes: (1) (2) Segment income and losses are adjusted based on operating income reported on the quarterly consolidated statements of income for the corresponding period. Not applicable Not applicable (855) Operating income on the statement of income (1,726) (12) Unallocated corporate costs Intra-segment sales (millions of yen) "Other" comprises businesses, such as logystics businesses, that are not included in reportable segments. Reportable segments 2. Reconciliation and main components of differences between income and loss of reportable segments and figures on the statement of income (information on differences) Segment income (loss) (millions of yen) Amount Total for reportable segments (870) 3. Impairment loss on fixed assets or goodwill by reportable segment (Significant impairment losses on fixed assets) Not applicable (Significant changes in the amount of goodwill) Not applicable (Material Gain on negative goodwill) Not applicable (5)Notes on Significant Changes in the Amount of Shareholder's Equity (6)Subsequent Events Total other losses 10 14

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